On Wednesday, Keefe, Bruyette & Woods maintained a Market Perform rating on T. Rowe Price (NASDAQ:TROW), with a steady price target of $120.00. T. Rowe Price has reported an increase in May long-term net inflows, totaling $6.7 billion. This increment has brought the quarter-to-date (QTD) flows to a negative $1.1 billion. A significant institutional fixed income mandate was noted for its substantial contribution to the inflows, estimated at approximately $9 billion.
The second quarter is currently on track to see outflows of $6.2 billion, which is an improvement compared to Keefe, Bruyette & Woods' earlier forecast of $10.5 billion and the consensus expectation of $10.3 billion. Despite quarter-to-date outflows, the end-of-period assets under management (AUM) for T. Rowe Price were reported to be below the firm's estimate but still surpassed the consensus estimate.
The firm anticipates that T. Rowe Price shares are likely to experience a positive reaction in response to the reported May inflows. The statement reflects a more favorable outcome than what was previously anticipated by both the firm and the consensus. This development suggests a potential shift in investor sentiment towards T. Rowe Price, as the company's recent performance in attracting inflows could be seen as a positive indicator.
In other recent news, T. Rowe Price Group, Inc. announced robust Q1 2024 results, with earnings per share rising by 40% to $2.38 and assets under management (AUM) increasing by 15% to $1.54 trillion. Despite net outflows of $8 billion, the firm's AUM and earnings showed notable growth. T. Rowe Price's preliminary AUM for the end of May totaled $1.54 trillion, with net inflows of $6.7 billion for the month, largely due to significant institutional fixed-income investments. The firm's equity assets rose to $790 billion in May, up from $762 billion at the end of April.
Evercore ISI maintained its "In Line" rating for T. Rowe Price, revising the stock price target to $107.00, down from $110.00. This followed the company's Q1 results, which indicated an expectation for significant improvement in cash flows throughout the year. Evercore ISI's projections show a decrease in outflows from $82 billion in 2023 to $38 billion in 2024, followed by a reduction to $13 billion in 2025.
InvestingPro Insights
As T. Rowe Price (NASDAQ:TROW) garners attention for its May long-term net inflows and quarter-to-date performance, InvestingPro data provides a deeper financial context. TROW trades at an attractive P/E ratio of 14.15, suggesting a reasonable valuation relative to its earnings. The company's commitment to shareholder returns is evident through its impressive track of maintaining dividend payments for 39 consecutive years, currently offering a robust dividend yield of 4.33%. Additionally, the firm's liquidity position is solid, with liquid assets surpassing short-term obligations, indicating a strong balance sheet.
For those considering a deeper dive into T. Rowe Price's financial health and future prospects, InvestingPro offers additional insights. With InvestingPro Tips highlighting that analysts predict profitability for the current year and the company's proven profitability over the last twelve months, investors have further reasons to be optimistic. Moreover, for readers looking to access an expanded array of InvestingPro Tips, they can unlock additional tips with a special offer. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing investment strategies with comprehensive data and analysis.
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